Political conditions for EU funds prompt debate

Negotiations for the 2021-2027 EU budget will start only next year, but amidst a revenue shortfall due to Brexit and tensions over some member states' behaviour, the question of putting more conditions on cohesion funds has come to the forefront.

With the UK leaving the EU, the bloc's budget will have a 10 to 11-billion hole to fill each year, the EU budget commissioner, Günther Oettinger, pointed out on Monday (26 June).

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At the same time, the EU will have to spend more on "new tasks that make sense to do at EU level", such as managing EU borders or taking refugees, he said.

Oettinger was speaking at the Cohesion Forum in Brussels, where the issue was debated, two days before the European Commission presents its ideas on the future of EU finances - on Wednesday.

In the EU budget, cohesion policy is an important part, financially as well as politically. At almost €360 billion, it represents around a third of the current 2014-2020 budget.

"Given our huge ambitions in this EU project, let me put this tactfully, the sums we are talking about are quite modest," Karl-Heinz Lambertz, the first vice-president of the European Committee of the Regions, said in a meeting earlier on Monday.

He insisted that while the EU needs a "stronger" cohesion policy, "the financial dimension is important, but also the underlying principles."

The debate about which principles should determine which cohesion funds are distributed was launched after some EU countries refused to apply EU "solidarity" during the 2015-2016 refugee crisis.

It was also triggered by concerns about the rule of law in Poland and Hungary and was heated up further by the prospect of less funding being available after Brexit.

'Sensitive domain'

On Monday, however, he said that while "we can't shy away from this question", it is not "in the commission's mandate" to answer it.

"It's a sensitive domain," he added.

Germany, the biggest contributor to the EU budget, has also raised the threat of linking access to EU funds to respect for the rule of law.

In a recent document outlining its position on cohesion policy after 2020, the German government said that "it would be worth exploring the possibility of making EU cohesion funding subject to compliance with the basic principles underpinning the rule of law."

On Monday, a German official said that there is "nothing specific on this as yet".

Kirsten Scholl, deputy director general for European Affairs at the German economy ministry, said that "various tools" exist at the EU level to deal with concerns over the rule of law, and that cutting cohesion funds in case of problems is only "an aspect that we are discussing".

Seen from the Committee of the Regions' perspective, making cohesion funds dependent on the rule of law or participation in refugee relocation schemes is a non-starter.

"I believe this is not possible legally," said Michael Schneider, the committee's rapporteur on the future of cohesion policy beyond 2020.

He pointed out that two-thirds of the committee's delegates "decided not to open that Pandora’s box", when the Italian delegation put forward a proposition to cut funds to countries that do not take asylum seekers.

'Not a charity'

"We believe that this type of measure runs counter to the principles of cohesion policy," he insisted. "If a member state does not respect rules, and then cohesion funds are withheld, you are not punishing the national government but the cities and regions, which might disagree with the national government."

"Cohesion policy is not a charity. It is more like a constitutional right to ensure cohesion, added Schneider, who is a German centre-right European People's Party (EPP) politician, like Oettinger and German chancellor Angela Merkel.

Another proposed condition to receive EU funds seems to be less controversial, however.

In its position paper, Germany says that respect of the commission's economic recommendations should be taken into account before dispatching funds.

This would "create an additional incentive for member states to comply with the recommendations and also result in better link between EU cohesion policy … and the relevant country-specific recommendations," it said.

This was echoed by Oettinger, as well as EU commission vice-president Jyrki Katainen.

In a speech also at the Cohesion Forum, he said that cohesion policy should "incentivise structural reforms".

"We would seek to find ways that support structural reforms by providing positive incentives to member states," he said.

Investigation

EUobserver has obtained internal documents and emails from within the European Commission that outline questionable contracts with outside suppliers who appear to be overcharging for goods and services.